Now the Irvine-based company is looking to repay the favor—and perhaps find an emerging new business partner or two as well.
The approximately $5 billion-valued company (NYSE: AYX) last week announced the formation of Alteryx Ventures, a $50 million fund that will invest in companies “with innovative technology and services that complement and expand” its own analytics and data science products.
It’s the first fund of its kind for the closely watched area tech company, and marks one of the more notable new initiatives for the company under the watch of Mark Anderson, who took over the CEO role last October from company co-founder Dean Stoecker, who now serves as executive chairman.
Anderson announced the creation of the Alteryx Ventures last week in conjunction with the company’s Global Inspire conference, an annual event—held virtually this year—that’s become a big gathering for the analytics crowd.
It was one of several notable announcements for the software company in coordination with the annual event, which was expected to attract some 20,000 online attendees.
Among other initiatives, Alteryx also said last week it was starting an online education program, called SparkED, which it hopes will produce 1 million certified participants by the end of 2023.
Crowded Space
Alteryx’s software allows companies to manipulate huge amounts of data to find insights for business decisions, unifying analytics, data science and business process automation into one platform. Anderson said his goal is to “help make it easy for everyone to access and democratize data.”
The Alteryx vision “centers on enabling every person to achieve breakthrough outcomes from data through analytics automation, data science and unprecedented ease-of-use,” according to the company.
The venture fund and educational programs are designed to move the company, its customers, and users forward, as well as make the company stand out in an increasingly crowded field; there are more than 400 companies involved in data analytics and related areas, according to CEO Anderson.
It’s not just pure analytic firms that the company competes against.
Alteryx said in its latest annual report that competitors include manual, spreadsheet-driven processes and custom-built approaches, as well as “data preparation and/or advanced analytic modeling tools” from Microsoft, Oracle, and SAS Institute.
Anderson says there’s plenty of business for everyone, since the overall revenue opportunity—known as the total addressable market—is $49 billion.
“That’s a lot for everybody to go after,” he told the Business Journal on May 14.
That said, “the market that we play in is a very, very fast-moving market,” prompting the company’s latest initiatives that are designed to keep it on the leading edge of new advancements in the analytics industry, he says.
“I like our advantages. We have hundreds of thousands of users, we’ve got well over 7,200 customers,” according to Anderson. “We plan on making it easy for them to choose Alteryx.”
The customer’s roster reads like a Who’s Who of American and international businesses, including Amway, Coca-Cola, Audi, HSBC and Netflix.
Anderson is confident Alteryx will stay ahead of the pack of competitors.
“The more people that give us a try will want do to business with us, because we’re better,” he says.
Stock Hit
After a $60 million Series B round in 2014, and subsequent $85 million funding round in 2015, Alteryx went public in 2017 at $14 a share.
Until last year, stock moves trended in one direction for Alteryx. Last summer, shares approached $190, making Alteryx one of OC’s five largest public companies by market valuation.
Its stock price has since taken a tumble, and was trading around $76 last week. While sales have continued to climb, sales growth has slowed, apparently scaring off some investors and analysts.
Revenue in the first three months of this year was $118.8 million, an increase of 9% compared to the year-ago period, but far off the annual growth pace of 50% in years past.
CEO Anderson says he remains “very optimistic.”
“Wall Street and our investors are waiting and seeing and going to be judging us on more than just a quarter’s worth of execution,” Anderson said.
“You execute on your commitments, quarter in, quarter out, and over the mid and long term the stock usually takes care of itself.”
Buyer or Seller?
In addition to the venture fund announcement, Alteryx used last week’s Global Inspire to announce a series of new innovations in analytics and data science automation, analytics in the cloud, machine learning and artificial intelligence.
The company has begun to say the results lead to data being transformed into a “breakthrough” for users.
Might the new $50 million fund help steer Alteryx towards a few acquisition candidates? That remains to be seen, though Anderson makes it clear the company is interested in making more acquisitions, without providing details.
“I wouldn’t be surprised if you see action there,” according to Anderson, the former president of Palo Alto Networks.
“We have a billion dollars of cash on the balance sheet. And our plan consistently has been to use that to make strategic acquisitions, whether it’s people or technology or both.”
What about the flip side of the coin—being taken over by another company?
“Generally, in technology, hostile takeovers don’t work, and that’s why you don’t see very many, if any,” he says in response.
